reverse mortgages

A three-year examination of reverse mortgage complaints to the Consumer Financial Protection Bureau shows that borrowers often didn’t understand the terms of those loans, including how quickly their loan balances would go up and their home equity would fall, the bureau said in a new report. Reverse mortgages allow homeowners age 62 and older to tap into the equity in their homes. They’re different from home equity credit lines or home equity loans because a reverse mortgage generally is paid back only when the homeowner …

At the time AARP took up their cause, Robert Bennett of Annapolis, Md., and Leila Joseph of Brooklyn, N.Y., had several things in common. They were older Americans. They were widowed. They were homeowners. And they both faced foreclosure and eviction on reverse mortgage loans. So when AARP won a big lawsuit on their behalf against the U.S. Department of Housing and Urban Development (HUD) several months ago, it was great news. Now, AARP Foundation Litigation has filed a class-action …

Mulling over the prospect of getting a reverse mortgage? Read on. You just might find that big changes to the program make these loans less appealing. Assistant Secretary for Housing Carol Galante says the Federal Housing Administration is taking “aggressive action” to shore up its future after the housing meltdown left it in financial straits. Projected losses for the nation’s reverse mortgage program was $2.8 billion as of last year, she said in testimony before the House Financial Services Committee …

Most reverse mortgage borrowers choose to tap their home equity in a lump sum payment provided by the lender, rather than as a line of credit. But that offering is about to change. According to a spokesman for the U.S. Department of Housing and Urban Development, lenders will stop providing huge lump sums that equal all or most of the equity in a borrower’s home. Instead, new guidelines about to be released will require borrowers to set aside a portion …

Reverse mortgages are growing in popularity as older adults tap their home equity to help them maintain their standard of living in retirement. But these loans come with potentially serious risks and AARP has been working for years to educate older homeowners on reverse mortgages, so they don’t get into trouble. The New York Times reported Monday about some of the more extreme problems that people can face after taking on a reverse mortgage, including foreclosure. The cases involved seniors whose …

Reverse mortgages are not being used as Congress intended, according to a new report from the government watchdog agency Consumer Financial Protection Bureau (CFPB). Reverse mortgages were created to provide an income options for retirees. But these mortgages are increasingly being taken out by younger borrowers, which could decrease long-term retirement security. Borrowers also tend to take lump-sum payments that can be used up quickly.